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NU orphan cash deal disappoints advisers

Advisers feel let down by the Norwich Union £1bn reatt- ribution deal reached last week after nearly two years of talks with policyholder advocate Clare Spottiswoode.

It offers over a million policyholders in the CGNU Life and CULAC funds a one-off cash payment averaging £1,000 to sign away rights to future distributions from the funds’ inherited estates.

This is in addition to an earlier agreement for a special distribution of £2.1bn from the funds’ surplus, meaning policyholders that accept the offer will effect- ively take a 70 per cent share of the surplus.

Spottiswoode said she was “delighted” with the outcome but some advisers are disappointed with the deal.

Syndaxi Financial Planning principal Robert Reid says: “This deal could have been struck in one afternoon, so when you look at how much it has cost and how long it has taken I do not think Spottiswoode should be congratulated.”

Worldwide Financial Planning IFA Nick McBreen says: “This is nothing to get excited about. It is a small benefit for clients who will have to maintain their investments in the with-profits funds with a potential loss on the upside of being invested elsewhere.”

Aviva’s interim results show a 14 per cent increase in UK life profits from £413m to £471m for the first half of this year while life and pension sales are up slightly by 1 per cent to £1.59bn.

Fitch Ratings senior dir- ector of insurance David Prowse says the first interim results from life offices are “pleasantly surprising”.

He says: “There could be a time lag before recession fears have an impact on life and pensions as premiums often come out on direct debit so it is not something that consumers automat- ically think to cut back on. The gloomy news could be still to come.”


Recovery position

House prices have been falling since last October, according to Nationwide’s house price index. They have declined every month since and are now 9 per cent off the peak.

Changes to early exit pension charges

In November last year, the FCA announced that from 31 March 2017, early exit pension charges will be capped at 1% for those customers who are eligible to access their retirement savings from age of 55. The rules also state that for new personal pension plans started after that date, or on new increments into […]


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